Revenue Note for Guidance

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Revenue Note for Guidance

959AR Date for payment of corporation tax: companies other than with relevant accounting periods

Summary

This section sets out the due dates for the payment of corporation tax by companies other than those with “relevant accounting periods”, that is, small companies and those with short accounting periods. Preliminary tax is payable in one instalment and is due 31 days before the end of the accounting period (i.e. normally in month 11 of the accounting period) – but no later than day 21 (or day 23 for electronic filers) of the month involved. Corporation tax is, in general, due by the return filing date for the accounting period. However, if relevant preliminary tax requirements have not been met, the due date reverts to the due date for the payment of preliminary tax.

Details

A small company (as defined in section 959AM(1)) and a company with a short accounting period (under section 959AM(2)) make a single payment of preliminary tax. The preliminary tax appropriate to an accounting period is due and payable:

  • 31 days before the accounting period end, or 21st of the month if it would otherwise be later. If using ROS the relevant date is the 23rd of the month.
  • Where an accounting period is less than one month, preliminary tax must be paid by:
    • The last day of the accounting period
    • The 21st day of the month in which the last accounting period ends, if it ends after 21st day (23rd day for ROS)

The balance of tax payable is due by the specified return date.

Any tax due and payable under an assessment on the company will also be due and payable before the specified return date .

The balance of tax shall be deemed to have been due on the due date for preliminary tax where:

  • the chargeable person has defaulted in the payment of preliminary tax
  • in the case of a small company, the preliminary tax paid was less than:
    • 90% of the current year liability or
    • 100% of the prior year’s income and corporation tax liability
  • in the case of a company with a short accounting period, the preliminary tax paid was less than 90% of the current year liability.
  • the preliminary tax was not paid by the due date.

When determining whether or not a company with a short accounting period met the 90% test, and

  • they would have met the test but for a chargeable gain or gains / losses on financial assets in the period after the payment of preliminary tax, and
  • they make a top-up payment of preliminary tax within one month of the end of the accounting period bringing the total preliminary tax paid to 90% of the current year liability,
    or
  • they would have met the test but for a disallowable amount under Part 35D, and
  • they make a top-up payment of preliminary tax within six months of the end of the accounting period bringing the total preliminary tax paid to 90% of the current year liability,

then the chargeable person will have met their preliminary tax obligations under this section.

The provision allowing for a top-up payment of preliminary tax 6 months after the end of the accounting period to satisfy the 90% preliminary tax rule applies to accounting periods commencing on or after 1 January 2022 and ending on or before 31 December 2027.

Relevant Date: Finance Act 2021